The company uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $3.25 per direct labor-hour and its total fixed manufacturing overhead is $48,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $16,000 per quarter.

Kindly check the explanation section.

Explanation:

The direct labour were budget to be four quarters, so let us take each quarters one after the other.

FIRST QUARTER:

=> Budgeted direct labour hours = 8000.

=> Variable overhead rate = 3.25.

=> Variable manufacturing overhead = 8000 × 3.25 = 26,000.

=> Fixed manufacturing overhead= $48,000.

=> Total manufacturing overhead= 26000 + 48000 = 76,000.

=> Depreciation = 16,000.

=> Cash disbursement for manufacturing overhead = 76,000 - 16000= $ 58,000.

SECOND QUARTER:

=> Budgeted direct labour hours = 8200.

=> Variable overhead rate = 3.25.

=> Variable manufacturing overhead = 8200 × 3.25 = 26,650.

=> Fixed manufacturing overhead= $48,000.

=> Total manufacturing overhead= 26650 + 48000 = 74,650.

=> Depreciation = 16,000.

=> Cash disbursement for manufacturing overhead = 74,650 - 16000= $ 58,650.

THIRD QUARTER:

=> Budgeted direct labour hours = 8500.

=> Variable overhead rate = 3.25.

=> Variable manufacturing overhead = 8500 × 3.25 = 27,625.

=> Fixed manufacturing overhead= $48,000.

=> Total manufacturing overhead= 27625 + 48000 = 76,625.

=> Depreciation = 16,000.

=> Cash disbursement for manufacturing overhead = 76,625 - 16000= $ 59,625.

FOURTH QUARTER:

=> Budgeted direct labour hours = 7800.

=> Variable overhead rate = 3.25.

=> Variable manufacturing overhead = 7800 × 3.25 = 23,350.

=> Fixed manufacturing overhead= $48,000.

=> Total manufacturing overhead= 23,350 + 48000 = 73,350.

=> Depreciation = 16,000.

=> Cash disbursement for manufacturing overhead = 73,350 - 16000= $ 57,350.

For the four quarters;

(1). the total Budgeted direct labour hours= 32,500.

(2).the total Variable manufacturing overhead= 105,625.

(3). The total Fixed manufacturing overhead = 192000.

(4). The Total manufacturing overhead = 297,625.

(5). The total less depreciation = 64,000.

(6). The total Cash disbursement for manufacturing overhead = $233,625.

=> Also, the total Budgeted manufacturing overhead (fixed and variable) = 105,625 + 192,000 = 297,625.

=> total Budgeted direct labour hours= 32,500

Therefore, manufacturing overhead rate = 297,625/ 32,500 = $9.16.

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hi there, i would say your answer is:

b. there is a fixed quantity of resources and technology available.

hope that : )